Power sector circular debt: minister blames it on two provinces, tribal areas

LAHORE: The federal government claims that the default of power-sector payments of over Rs300 billion by Sindh, Azad Jammu & Kashmir (AJK), Balochistan and the Federally Administered Tribal Areas (Fata) is the main cause behind the Rs320 billion circular debt.

“The government of Sindh is yet to pay Rs60 billion to Rs70 billion while AJK, Balochistan and Fata are to pay Rs62 billion, Rs146 billion and Rs42 billion, respectively. This is the actual circular debt that stands at Rs320 billion,” State Minister for Water and Power Abid Sher Ali claimed while responding to queries made by reporters at a press conference at Wapda House on Tuesday.

“These aforementioned areas are the troubling ones as there is no problem with Punjab and Khyber Pakhtunkhwa which are regular in making payments with Rs5 billion to 6 billion of outstanding amounts. We don’t consider these two provinces as defaulters,” he added.

The minister claimed that none of the power plants belonging to the independent power producers (IPPs) was closed owing to non-payment of dues. Nepra should check the IPPs’ efficiency level as it did with the public sector’s generation companies (Gencos).

He said the government would teach a lesson to the mafia for defaming it through advertisements in the print media.

He announced that there would be no loadshedding across the country by March next year. Loadshedding or shutdowns would continue on high loss feeders.

“It has been decided in principle that we will keep resorting to loadshedding in March 2018 and onward in the areas where the consumers are not paying electricity bill,” he said.

He said Gencos had been converted into a profit-oriented organisation due to reforms. “During the last government (PPP) regime, there was a practice of massive oil theft worth Rs7 billion to 8 billion annually in Gencos. But we plugged this leakage, resulting in a profit of Rs5.7 billion,” he said.

He said the government was set to double the total generation to over 26,000MW by March next year. “When we took over in 2013, the total generation was 13,600MW. Therefore, we worked hard and are now confident to say it will double as various power projects will start generation one by one.”

For example, he said, Nandipur power plant was being converted on gas and it would start generation of up to 525MW.

Answering a question, he said people would face less loadshedding in Ramazan this year.

Published in Dawn, March 29th, 2017